logo

Against Monopoly

defending the right to innovate

Monopoly corrupts. Absolute monopoly corrupts absolutely.





Copyright Notice: We don't think much of copyright, so you can do what you want with the content on this blog. Of course we are hungry for publicity, so we would be pleased if you avoided plagiarism and gave us credit for what we have written. We encourage you not to impose copyright restrictions on your "derivative" works, but we won't try to stop you. For the legally or statist minded, you can consider yourself subject to a Creative Commons Attribution License.


back

China--Land of the Rising Patent Regime

China's patent regime (and I"P" system generally) is growing like a weed. Trademark applications there have increased 60% in five years. The number of patents issued has almost doubled to 850,000.

China has added 50 courts that handle I"P" cases. The lawyers are getting rich and, of course, are preventing non-Chinese firms from filing patents or representing clients in court. In fact, the lawyers are the main beneficiaries of the monopoly formerly known as intellectual property. Isn't monopoly great?

The Economist notes that under Mao private property was considered to be theft of the masses. However, it gets it wrong when it implies that the patent laws enacted in China starting in 1985 (and enforced starting in 2001) were consistent with private property.

Patents are a kind of theft of the masses. As Prodhoun should have said, "intellectual property is theft."


Comments

I believe the commonly used paraphrase is "Intellectual Property is Mind Theft."
In my experience in Korea, you will not get enforcement of IP rights until the country enforcing them has domestic IP it wants protected. In Korea, we were trying to get the police to close small retailers selling pirate software and music CDs and movie DVDs. It proved to be pointless; the cops didn't have the heart to put the little guys out of business and they were soon back up and running. Things changed when Korean creators of IP wanted their monopolies protected. The fact that it is beginning to happen in China as suggested in this story is encouraging for the IP monopolists. We will soon have to look elsewhere for piracy. Fortunately there will always be another poor developing country in which to find it.
I wonder if the best anti-IP strategy might be to lobby the Chinese government, perhaps via some fellow economists at distinguished Chinese universities. The system is so ossified in the US that reform seems hopeless. But in China, the leaders might recognize the value of innovation and competition based upon the rapid tech transfer they achieved through leaky foreign joint ventures and that sort of thing. (And, BTW, I think this would have been a great example for the Against Intellectual Monopoly book -- Western firms couldn't extract their monopoly profits in China, but were willing to go there anyway!) Furthermore, the Chinese leaders, after being lectured by Western economists for so long, might relish some policy one-upmanship. The central government has the power to establish this sort of policy, and might find anti-monopoly rhetoric to be politically convenient in the near future, now that unemployment is rising. And then, once China begins to eclipse the West technologically with the use of its secret weapon -- weak IP law -- perhaps the fear and amazement will be enough to change the system here too.

Stephen:

Chinese companies are quite prolific patenters in the west. For example, Chinese companies increased the number of patents they obtained in the U.S. by a factor of nearly 20 between 1994 and 2007. U.S. companies, in comparison, increased their patents by about 40-45% in the same time frame, and Japanese companies increased their patents by only about 50%.

China has also recognized the value of a robust domestic patent system as foreign companies enter their country and often dominate the local technology. Indeed, Chinese investors are now asking whether patents are available to protect newly developed products. I think there are indications that Chinese companies (as has been typical with Japanese companies) may well be more strategically adept at using intellectual property than most western companies.

Why would China want to give up such a valuable tool to protect inventiveness? I suspect your entreaties will not only fall on deaf ears, but ears that are more frequently more pro-IP than western listeners.

Geoff:

Mind theft? That is sick. You cannot steal something from an inventor unless the inventor wishes to make the invention available to the world. To pretend that an inventor should be required to share their invention is a travesty.

Patents that can be used against Western firms are always useful, of course. The question is, might China's leaders be convinced that enforcing patent claims among Chinese firms is a bad idea? I notice that L.E.H. opposes the premise of this blog, so let's just consider that question to be hypothetical.

Given that American trade representatives have been whining for years over lax IP enforcement in China, perhaps continued feet-dragging could eventually result in retaliation from the US. But what does China have to lose? If their economy is flexible enough, then maybe they can afford a hit to their export markets. Why do they need to sell anything for the next 10 years? The world owes them $1.9 trillion, last I checked.


Submit Comment

Blog Post

Name:

Email (optional):

Your Humanity:

Prove you are human by retyping the anti-spam code.
For example if the code is unodosthreefour,
type 1234 in the textbox below.

Anti-spam Code
UnoCincoCincoEight:


Post



   

Most Recent Comments

The right to rub smooth using a hardened steel tool with ridges Finally got around to looking at the comments, sorry for delay... Replying to Stephan: I'm sorry

Let's See: Pallas, Pan, Patents, Persephone, Perses, Poseidon, Prometheus... Seems like a kinda bizarre proposal to me. We just need to abolish the patent system, not replace

The right to rub smooth using a hardened steel tool with ridges I'm a bit confused by this--even if "hired to invent" went away, that would just change the default

Do we need a law? @ Alexander Baker: So basically, if I copy parts of 'Titus Andronicus' to a webpage without

Do we need a law? The issue is whether the crime is punished not who punishes it. If somebody robs our house we do

Do we need a law? 1. Plagiarism most certainly is illegal, it is called "copyright infringement". One very famous

Yet another proof of the inutility of copyright. The 9/11 Commission report cost $15,000,000 to produce, not counting the salaries of the authors.

WKRP In Cincinnati - Requiem For A Masterpiece P.S. The link to Amazon's WKRP product page:

WKRP In Cincinnati - Requiem For A Masterpiece Hopefully some very good news. Shout! Factory is releasing the entire series of WKRP in Cincinnati,

What's copywritable? Go fish in court. @ Anonymous: You misunderstood my intent. I was actually trying to point out a huge but basic

Rights Violations Aren't the Only Bads I hear that nonsense from pro-IP people all the

Intellectual Property Fosters Corporate Concentration Yeah, I see the discouragement of working on a patented device all the time. Great examples

Music without copyright Hundreds of businessmen are looking for premium quality article distribution services that can be

Les patent trolls ne sont pas toujours des officines

Les patent trolls ne sont pas toujours des officines

Patent Lawyers Who Don't Toe the Line Should Be Punished! Moreover "the single most destructive force to innovation is patents". We'd like to unite with you

Bonfire of the Missalettes!

Does the decline in total factor productivity explain the drop in innovation? So, if our patent system was "broken," TFP of durable goods should have dropped. Conversely, since

Does the decline in total factor productivity explain the drop in innovation? I wondered about TFP, because I had heard that TFP was increasing. Apparently, it depends on who

Music without copyright I do agree with all the ideas you have presented in your post. They are very convincing and will